• Avrahami V. Commissioner: The Much Anticipated First Case Examining the Validity of a Microcaptive Insurance Company
  • November 24, 2017
  • The U.S. Tax Court, in Avrahami v. Commissioner, decided, for the first time, what it takes for a captive insurance company making a Section 831(b) election (a “microcaptive”) to qualify as an insurance company. While the Avrahami opinion is primarily relevant to microcaptives, aspects of the Tax Court’s discussion on risk distribution and insurance pools are relevant for captives that have not made an 831(b) election. The author of this article discusses the decision and next steps.